- GBP/JPY is trading in a narrow channel on Friday.
- Wall Street's main indexes look to open in the positive territory.
- BoE's Vlieghe says negative rates could be needed later in the year.
The GBP/USD pair climbed to its highest level in more than a year at 147.80 on Thursday and seems to have gone into a consolidation phase on Friday. As of writing, the pair was virtually unchanged the day at 147.68.
Risk flows could hurt JPY during American session
On Thursday, rising US Treasury bond yields made it difficult for the JPY to find demand and helped GBP/JPY to gather bullish momentum. Additionally, the sharp upsurge witnessed in the GBP/USD pair provided an additional boost to the British pound.
At the moment, the S&P 500 Futures are up 0.42% on the day and if risk flows continue to dominate the markets in the second half of the day, GBP/JPY could try to regain its traction.
Earlier in the day, the data from the UK showed that the business activity in the manufacturing sector expanded at a strong pace in February.
Meanwhile, Bank of England (BoE) policymaker Gertjan Vlieghe argued on Friday that a large amount of evidence gathered from countries that already have negative rates show that that negative rates are effective.
Vlieghe further noted that negative rates could be needed later this year or into the next year if there is persistent labour market slack to keep wage pressures low. These dovish comments might be limiting the GBP's gains for the time being.
Technical levels to watch for
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